I. Field of the Invention
The present invention relates to an online data management system, and more specifically an online system that allows a tax collector to distribute property tax data to a plurality of mortgage lenders, their tax servicing companies and bulk property tax payers via a web portal. That web portal may eliminate the sending of property tax data files to individual mortgage lenders, bulk property tax payers, and tax servicing companies and may replace it with a daily property tax data update that may ensure data integrity, may inform the mortgage lenders about when the tax collector collects property taxes, may validate the property parcel portfolios of mortgage lenders, bulk payers and tax servicing companies. The web portal may at the same time report the updated property tax data to the payers, including the updated amounts due for each property. The web portal may also allow the payers to perform a payment action that automatically creates and distributes a properly formatted payment file to the tax collector that is free of formatting errors, invalid parcel IDs, underpayments or overpayments and free of duplicate payments.
II. Description of the Related Art
Typically, a tax collector or local tax agency attempt to send tax information and other notices relating to property tax payments to various lenders or bulk payers through traditional offline means such as by mail, fax, phone, or the like. A tax collector will often have to separately send notices of payment, and collect property taxes from each lender and bulk payer it does business with one at a time through such traditional offline means. Any errors that have to be corrected are also corrected through traditional offline means.
Mortgage lenders escrow property taxes and pay those property taxes to the appropriate taxing agency or tax collector depending on where the property is located. Mortgage lenders escrow property taxes based on previous year's property tax assessments. Mortgage lenders need access to information regarding up-to-date property tax amounts. That information is distributed by taxing agencies or tax collectors in various offline or online forms. Typical methods of distributing that information is by means of paper bill copies, diskettes, CD-ROMs, magnetic tape, cartridges, email or FTP. To date, there is no standardized data format or output layout regarding the distribution of property tax data to mortgage lenders. Each mortgage lender must be capable of accepting a variety of formats in a variety of media, making data acquisition a very complex and fragmented process. Due to the complexity of this operation, most mortgage lenders use tax servicing companies to perform the duties of collecting property tax data from tax collectors, reporting those to each lender, and then paying the property taxes to each tax collector on behalf of each mortgage lender.
Tax servicing companies have to acquire the data from each tax collector in the same exact fashion as an individual mortgage lender. Tax servicing companies have to pay property taxes in bulk in the exact same way an individual mortgage lender would with the exception that data acquisition and tax payments are performed in bulk for all the mortgage lenders they service. Tax servicing companies have established a professional practice around acquiring, reporting and paying property taxes on behalf of mortgage lenders. Tax servicing companies maintain customer numbers for each of the lenders they service. They also must maintain a list of lender codes that get assigned to each of their mortgage lender customers. Since tax service companies work on a regional or national level, they maintain lender codes for each of their lender customers for each of the hundreds or thousands of tax collectors they receive data from and make payments to. Tax collectors on the other hand must keep track of lender codes and assign a new lender code for every new lender that operates in their tax district. The management of lender codes becomes a serious task for the tax collector and even more so for tax servicing companies.
Property tax collection periods vary from State to State, County to County, municipality to municipality or district to district. These could range from annual tax collections to quarterly collections. Some State statutes loosely define when these property tax collections must be held, therefore leaving the scheduling of these collections to the various taxing agencies. Mortgage lenders must be aware of when each taxing agency is collecting in advance in order for the Mortgage Lender to request access to the property tax data in order for the Mortgage Lender to begin the process of balancing their escrow accounts and paying property taxes on time. Tax collectors request from mortgage lenders bulk payments in various forms. These forms of payment vary from paper checks for each property tax that has been escrowed to ACH transactions for groups of property taxes or wire transfers. A standard method of payment has not been defined by the industry. Tax collectors require mortgage lenders to communicate which property parcels are being paid for by requesting a specific file to be sent to the tax collector along with the payment. The payment file is in a variety of formats and a variety of layouts varying from tax collector to tax collector.
From time to time a tax collector may also need to add one or more lenders and bulk payers to their approved list of bulk payers in order to provide to them property tax data and collect property tax payments. The addition of the new lender or bulk payer to the approved list of lenders or bulk payers is done by offline means in which phone calls, letters and emails are needed. The tax collector would also only learn if the prospective lender has acknowledged being connected to the tax collector through a traditional offline means. A period of time typically associated with offline means of communication would also follow before a tax collector would learn if a prospective lender has accepted the invitation to be connected to the tax collector.
A tax collector might also have to collect property taxes from lenders without being able to remind lenders in a timely manner of when payments are due, or if payments are past due with traditional offline means. A tax collector may also receive duplicate payments on property taxes from one or more lenders wherein a lender mistakenly believes that it is still responsible for a payment parcel that is no longer in its possession. In other cases, the tax payer may pay their own property taxes in error without knowing that their lender is responsible for paying their property taxes via escrow. This will cause a refund to be issued by the tax collector. The refund may be issued to the tax payer, the lender, or whomever paid last. Issuing refunds is one of the most involved processes for a tax collector since it requires involvement from all the departments of the tax collector's office and in many instances requires coordination between the payers and the tax collector to determine who must receive the refund. The issuance of refunds is a lengthy process that can take weeks to months and as long as one year to complete. During that period, all the parties involved in the refund process must continuously attend to that process by requesting status on the refund from the tax collector, receiving phone calls and letters from tax payers that want their money back and having confusion about why the refund has not been issued. There is a risk of duplicate payments along with the risk of failure to issue refunds by tax collectors.
A few weeks to a few months prior to the property tax collection period, most tax collectors request mortgage lenders to submit a list of the property parcels they plan to pay for during the property tax collection period. The submission process is done by a variety of means and media ranging from paper lists to emailed lists and from plain text files to specifically formatted data files. Depending on the State Statute, tax collectors use the information submitted by mortgage lenders to print on the property tax bills the information of the mortgage lender that is responsible for paying the property tax bill. The tax collectors may also use the information to suppress the printing of the property tax bill, or to print a property tax statement instead of a property tax bill, with the goal that the tax payer will refrain from a duplicate payment of the property tax bill in error. The process of eliminating the duplicate payment of the property tax bill will subsequently reduce the possibility of the tax collector issuing refunds. An efficient online process may help inform mortgage lenders about when tax collectors need this information and provide the data format in which mortgage lenders must submit this information.
Apart from mortgage lenders and tax servicing companies there are a number of groups that are responsible for paying property taxes in bulk. These are property management companies, real estate developers, utility companies, land managers, theme parks, utilities, title companies and individual large property owners. These groups do not participate in the offline bulk property tax process used between mortgage lenders and tax collectors because they do not have the information technology resources to be able to produce complicated property tax payment data files. These groups pay property taxes by sending paper checks through the mail or by paying in person at the tax collector's office many times occupying a teller for hours at a time and creating high transaction costs for the tax collector.
Many tax collectors collect property taxes from individual tax payers online by allowing tax payers to pay individual property taxes by credit or debit card or electronic check. There is no established method to prevent a tax payer from paying on a property tax that a mortgage lender has escrowed and is expecting to pay. This happens because mortgage lenders pay property taxes very close to the due date of the property taxes and the system that present property tax information to individual payers for the purpose of accepting online payments does not utilize a real-time database shared by mortgage lenders. A unified database system may be used by all types of payers, mortgage lenders, tax servicing companies, bulk payers and individual payers for the bill presentment of property tax information and the processing of property tax payments.